Correlation Between ProShares Ultra and SPDR FTSE
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and SPDR FTSE at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ProShares Ultra and SPDR FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Ultra Semiconductors and SPDR FTSE International, you can compare the effects of market volatilities on ProShares Ultra and SPDR FTSE and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in ProShares Ultra with a short position of SPDR FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and SPDR FTSE.
Diversification Opportunities for ProShares Ultra and SPDR FTSE
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ProShares and SPDR is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Semiconductors and SPDR FTSE International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR FTSE International and ProShares Ultra is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on ProShares Ultra Semiconductors are associated (or correlated) with SPDR FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR FTSE International has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and SPDR FTSE go up and down completely randomly.
Pair Corralation between ProShares Ultra and SPDR FTSE
Considering the 90-day investment horizon ProShares Ultra Semiconductors is expected to generate 8.3 times more return on investment than SPDR FTSE. However, ProShares Ultra is 8.3 times more volatile than SPDR FTSE International. It trades about 0.1 of its potential returns per unit of risk. SPDR FTSE International is currently generating about -0.01 per unit of risk. If you would invest 2,429 in ProShares Ultra Semiconductors on September 15, 2024 and sell it today you would earn a total of 4,222 from holding ProShares Ultra Semiconductors or generate 173.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Semiconductors vs. SPDR FTSE International
Performance |
| Timeline |
| ProShares Ultra Semi |
| SPDR FTSE International |
ProShares Ultra and SPDR FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and SPDR FTSE
The main advantage of trading using opposite ProShares Ultra and SPDR FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, SPDR FTSE can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SPDR FTSE will offset losses from the drop in SPDR FTSE's long position.| ProShares Ultra vs. ProShares Ultra SP500 | ProShares Ultra vs. Direxion Daily SP | ProShares Ultra vs. Direxion Daily SP | ProShares Ultra vs. MicroSectors FANG Index |
| SPDR FTSE vs. SPDR Bloomberg Emerging | SPDR FTSE vs. Vanguard Emerging Markets | SPDR FTSE vs. SPDR Bloomberg Barclays | SPDR FTSE vs. VanEck JP Morgan |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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